Providing members with Commercial Insurance solutions
Consortium Procurement (the commercial arm of the Northern Housing Consortium) have been providing our members with OJEU compliant frameworks for over 20 years. Our approach to our framework development has always been done with a member focused ethos ensuring that any framework we choose to develop is one that is wanted by our membership and increases their ability to procure effectively.
We have been providing members with our Tenants Contents Insurance framework with great success for many years now. With continued member engagement around insurance requirements it became clear there was a need for more competition within the commercial insurance market available to housing providers. With a limited number of insurers operating in the market our members felt that premiums were being raised beyond expectations towards the end of the year leaving them with little time or options to go to market.
We therefore decided to develop a solution to help members overcome this – our Commercial Insurance Dynamic Purchasing System (DPS). A DPS is an electronic system through which contracting authorities can source requirements by inviting tenders from insurers admitted to the DPS. Unlike framework agreements, insurers can apply to join the DPS at any time; and they are not required to submit tenders in order to join the DPS. All insurers who meet the selection criteria will be admitted to the DPS. This means more streamlined procurement for both insurers and members – insurers don’t have to demonstrate suitability and capability every time they wish to compete for a contract and the award of individual tenders can be quicker than under other procedures.
It was our aim to attract both existing and new market capacity to the Solution, and in doing so, provide more choice to our members. Quality of coverage is important, and the tender evaluation process will reflect this – as is the availability of cost guarantees so that members have long term comfort that premiums are sustainable and deliver value for money.
We have gone through a methodical, formal tender and award process to appoint Marsh as our brokers and continue to apply a consistent award criteria to every participating insurer joining the DPS, creating a level playing field which is attractive to new insurers entering the sector. In accessing the DPS, members benefit from the usual advantages associated with a framework procurement route. These include improved administrative efficiency vs running a full OJEU tender, and less risk of uncertainty or procurement challenge.
Some members have expressed concern that if their incumbent insurer elects not to participate in the DPS, they will be excluded from the insurance tender – in reality their incumbent can choose to join the DPS at any point in time and if they decide not to they are excluding themselves. Against a threat of increased competition, it is predictable that insurer(s) who are already dominant in the market should be most resistant to the DPS (they have the greatest market share to lose). Over time, we hope to change this view.
To specifically address member’s concerns about engaging in a tender process in which their incumbent insurer may choose not to submit renewal terms, Marsh are willing to enter into individual confidentiality agreements with members and propose the following safety net:
- Ahead of the tender, Marsh insurance brokers will obtain key insurance information from a member such as claims experience, copy policy schedules, current premiums.
- Marsh will analyse this data pack and give their professional view and commitment to the premium and cover levels they anticipate securing via the DPS.
- If this is satisfactory, members can then appoint Marsh to run the tender process, safe in the knowledge that a competitive outcome will be achieved.
- If required, Marsh can enter into a confidentiality agreement to confirm they will not use this initial data request for any purpose other than the benchmarking exercise.
For more information on how Consortium Procurement and Marsh could save you money for all of your insurance needs please get in touch.